Homework Answers
Ans) When government gives subsidy, price paid by the consumers decreases while price received by sellers increases. It shifts the supply curve to the right.
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1) To support the bottom 40% of consumers in Malaysia the government provides a $1.00 subsidy...
30) The figure above shows that the government provides a subsidy to the farmers of ________...
30) The figure above shows that
the government provides a subsidy to the farmers of ________
million.
A) $350
B) $1,050
C) $50
D) $100
E) $700
Price (dollars per ton) 70+ S 60 50+ 40 Support price 35 25 10+ D 0 10 20 25 30 40 50 Quantity (millions of tons per year)
a) Draw a demand and supply model to illustrate the effects of a government subsidy paid...
a) Draw a demand and supply model to illustrate the effects of a government subsidy paid to milk farmers for every litre of milk they sell. (Chapter 6 of the text can help you with this). Assume that demand for milk is relatively inelastic, while the supply of milk is relatively elastic. Illustrate and explain what happens to the price farmers receive, the price buyers pay, the cost to government and the quantity of milk sold. (Do not use actual...
Draw a demand and supply model to illustrate the effects of a government subsidy paid to...
Draw a demand and supply model to illustrate the effects of a government subsidy paid to milk farmers for every litre of milk they sell. (Chapter 6 of the text can help you with this). Assume that demand for milk is relatively inelastic, while the supply of milk is relatively elastic. Illustrate and explain what happens to the price farmers receive, the price buyers pay, the cost to government and the quantity of milk sold. (Do not use actual numbers,...
Assume the government places a $1.00 subsidy on the sale of every bottle of hand santizer....
Assume the government places a $1.00 subsidy on the sale of every bottle of hand santizer. The subsidy is paid to the producers of the hand santizer. The figure below shows the annual market for hand santizer before and after the subsidy is imposed. Market for Hand Sanitizer Price (per bottle) 0 to, o 0 1 2 3 4 5 6 7 8 Quantity (billions of bottles) Price (per bottle) 0 1 2 3 4 5 6 7 8 Quantity...
A subsidy is a benefit given by the government to groups or individuals, usually in the...
A subsidy is a benefit given by the government to groups or individuals, usually in the form of cash payment or tax reduction to encourage production. We can think of a subsidy as a “negative” tax. Suppose the government gives producers a specific subsidy of $4 per unit. (35 points) Using supply and demand curves, draw a diagram that clearly shows what happens when the specific $4 subsidy is implemented. What price do sellers receive and what do the consumers...
Suppose that the demand curve for wheat is Qd= 400-10p Qs= 10p The government provides producers with a specific subsidy...
Suppose that the demand curve for wheat is Qd= 400-10p Qs= 10p The government provides producers with a specific subsidy of S=$11 per unit. How do the equilibrium price and quantity change? The equilibrium price by $_______ and the equilibrium quantity by $_______ units. (Enter numeric responses using real numbers rounded to two decimal places.) What effect does this tax (subsidy) have on consumer surplus, producer surplus, government revenue, welfare, and deadweight loss? Consumer surplus (increase or decrease) by $...
Illustrate graphically the economic effects of an export subsidy of 15% if the world price is...
Illustrate graphically the economic effects of an export
subsidy of 15% if the world price is 90. Compute the producer
surplus. Numbers 8-10 please.
Price of Jet (millions Quantity of jets demanded Quantity of jets supplied 140 120 110 100 90 80 70 60 50 40 1200 1000 900 800 700 600 500 400 300 200 100 150 200 250 300 350 400 450 500 600 20 Draw the market supply and demand curves. What are the equilibrium price and...
A low income town decides to impose a $3 per unit subsidy on the consumers of...
A low income town decides to impose a $3 per unit subsidy on the consumers of T-shirts. The supply and demand for T-shirts are described by the following equations: Supply: Q = 2P Demand: Q = 20 - 2P Q measures the quantity of T-shirts, and P measures the price per T-shirt. a. Graphically illustrate the effect of this subsidy on the T-shirt market and calculate the consumer surplus with subsidy, producer surplus with subsidy and total surplus with...
After experimenting with an export subsidy for a couple of years, the Government of Home country...
After experimenting with an export subsidy for a couple of
years, the Government of Home country realizes that the
Government revenue annual decrease of $1,600 is not sustainable in
the long run. Assume that Home still faces a world price
of $100 per ton an Home growers of wheat still export 20
tons (see Fig. 4). However, starting year 3, the Government
replaces the Export subsidy with a Production
Subsidy. Using Fig. 4, answer the following questions:
1. What is...
Need help with this problem b-e, i did a already. Need help asap. Thanks Consider an agricultural subsidy provided by th...
Need help with this problem
b-e, i did a already. Need help asap. Thanks
Consider an agricultural subsidy provided by the US government. Consider also that milk is one of the products subsidized. If there is NO trade with the rest of the world, the domestic price of milk in the US would be $2.25 per gallon and the equilibrium quantity would be 100 gallons at this price. After trade opens, at the world market price of $1.50 per gallon,...
30) The figure above shows that
the government provides a subsidy to the farmers of ________
million.
A) $350
B) $1,050
C) $50
D) $100
E) $700
Price (dollars per ton) 70+ S 60 50+ 40 Support price 35 25 10+ D 0 10 20 25 30 40 50 Quantity (millions of tons per year)
Assume the government places a $1.00 subsidy on the sale of every bottle of hand santizer. The subsidy is paid to the producers of the hand santizer. The figure below shows the annual market for hand santizer before and after the subsidy is imposed. Market for Hand Sanitizer Price (per bottle) 0 to, o 0 1 2 3 4 5 6 7 8 Quantity (billions of bottles) Price (per bottle) 0 1 2 3 4 5 6 7 8 Quantity...
Illustrate graphically the economic effects of an export
subsidy of 15% if the world price is 90. Compute the producer
surplus. Numbers 8-10 please.
Price of Jet (millions Quantity of jets demanded Quantity of jets supplied 140 120 110 100 90 80 70 60 50 40 1200 1000 900 800 700 600 500 400 300 200 100 150 200 250 300 350 400 450 500 600 20 Draw the market supply and demand curves. What are the equilibrium price and...
After experimenting with an export subsidy for a couple of
years, the Government of Home country realizes that the
Government revenue annual decrease of $1,600 is not sustainable in
the long run. Assume that Home still faces a world price
of $100 per ton an Home growers of wheat still export 20
tons (see Fig. 4). However, starting year 3, the Government
replaces the Export subsidy with a Production
Subsidy. Using Fig. 4, answer the following questions:
1. What is...
Need help with this problem
b-e, i did a already. Need help asap. Thanks
Consider an agricultural subsidy provided by the US government. Consider also that milk is one of the products subsidized. If there is NO trade with the rest of the world, the domestic price of milk in the US would be $2.25 per gallon and the equilibrium quantity would be 100 gallons at this price. After trade opens, at the world market price of $1.50 per gallon,...
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